Imports of fertilizers have changed levels and are expected to exceed 5 million tons in the first two months of this year, which had already occurred in the same period in 2021.
Spending in 2022, however, is quite different from the previous year. In the first two months of this year, import costs could reach $2.7 billion, up 98% from the same period in 2021.
The trade balance data for February will be released by Secex (Secretariat of Foreign Trade) next Thursday (3). International fertilizer prices, which had been accommodating, rose again with the Russian invasion of Ukraine.
The fear is of a possible reduction in the global supply of these inputs, which would affect large grain producers. Brazil has a lot to lose, due to external dependence on fertilizer imports. The country buys in the foreign market close to 85% to 90% of what it uses in the field.
This concern is because the Russians are responsible for 15% of global exports of nitrogen fertilizers and 17% of potash.
Together, Russia and Belarus, which is also under trade sanctions from major powers, are responsible for 33% of world potash exports, according to the International Food Policy Research Institute (IFPRI).
These numbers justify the concern of Brazilians. In 2021, Russia and Belarus exported 11.7 million tons of fertilizers to Brazil, corresponding to 28% of what the country imported during the period.
This concentration is dangerous because the two countries, which occupy the second and third positions in the ranking of importance in Brazilian potash purchases, supplied 6 million of the 12.8 million tons imported last year.
Difficulty in Ukraine’s ports for grain exports keeps corn and wheat prices high on the international market. For Brazil, this war is also of great importance for soybeans.
The country has been registering an annual growth in area and an advance in the volume produced. Producers, who were already worried about recent input prices, may have new surprises with costs, depending on how long this war lasts.
Ukraine, which has been invaded, does not supply fertilizers but grain to the international market. Russia, the invader, would be able to continue shipping fertilizers, but the shipping companies, which operate in all markets, will suffer pressure from the great powers. These want to hurt the Russians for finance and international trade.
In the short time that it lasts, this conflict has already provoked the bombing of several commercial flag ships, which shows instability in navigation in the region.
An increase in production costs for the Brazilian producer, coming from fertilizers, is added to others and will interfere with the current planting of corn and soybeans in the second half of the year.
Many producers are already signaling a reduction in the use of technology in crops, including the use of less fertilizer. In addition, given recent weather effects and crop failures, insurance providers have become more reticent to participate in the market, in addition to raising prices.
Brazil imported 41.6 million tons of fertilizers last year. Of this volume, 60% came from just five countries. Russia led with 9.27 million.
The commodity market continues to react to the war and the possibility of problems in the world supply of grains and oil. This Monday (28), wheat reached US$ 9.3 per bushel on the Chicago Stock Exchange, up 10%. Corn reached US$ 6.97 per bushel, up 5.7%, and soybeans rose 3.7%.
Brent crude topped $100 a barrel in Europe, and West Texas rose to $95.5 in the United States.
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